Mission-Driven Business Planning 101 Shelly Kessler Nadia Gomes

Mission-Driven
Business Planning 101
Shelly Kessler, Partner and Director of Nonprofit Services
Nadia Gomes, Senior Consultant
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Mission-Driven
Business Planning 101
Shelly Kessler, Partner and Director of Nonprofit Services
Nadia Gomes, Senior Consultant
About TCC Group
For over 32 years, TCC has
developed strategies and
programs that enhance the
efficiency and effectiveness
of NGOs, philanthropies,
and corporate citizenship
programs to achieve social
impact. We work with
organizations in the US and
across the globe.
Learn
• Evaluation
• Research
Strategize
• Assessment
• Strategy
• Planning
Act
• Grantmaking
• Capacity Building
• Program Management
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Session Objectives
1. Clarify the definition and purpose of mission-based business
planning
2. Discuss the keys to success and pitfalls to avoid in
developing your mission-based business plan
3. Explore an overview of the components of a mission-based
business plan for nonprofits
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Mission-Based Business Planning
Definition and Purpose
Mission-Based Business Plan: What is it?
Business Plan
A plan for how a business (typically a specific line of the
business) is going to achieve its goals, including details on its
planned model (or its fit within a broader model), implementation
strategy, and profitability
Mission-Based Business Plan
An application of the above, typically in a nonprofit or NGO
context, wherein planned impact is tied to a social mission, and
represents a double bottom line (financial and social)
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What a Mission-Based Business Plan
for Nonprofits is NOT
Strategic Plan
A coordinated set
of priorities, goals,
objectives, and
strategies serving
as a “roadmap”
for a longer-term
(3, 5, or 10-year)
organizational
vision and mission
Operating Plan
A 12-month
document
outlining departmental activities
and tactics that
serve broader
organizational
goals and
objectives
Development
Plan
A coordinated set
of activities,
grounded in a
case statement,
intended to result
in established
goals for
contributed
income (e.g.,
grants, individual
gifts, etc.)
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Mission-Based vs. Traditional Business Planning:
5 Potential Areas of Added Complexity
1. Lack of standardized value for all elements of return on
investment (ROI)
2. Intangibility of product or service
3. Distinction between user and payer of the product or
service
4. Need to align with social mission
5. Lack of necessity for growth or scaling
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A Change in Lexicon
Mission-based values are reflected in the language used:
Mission
Competitive Advantage
Beneficiaries
Consumers
Community
Market
Needs Assessment
VS.
Gap Analysis
Social Value
Financial Returns
Funding
Investment
Donors
Investors
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Purpose of a Mission-Based Business Plan
•
•
•
Helps a nonprofit organization or a mission-critical program
increase the likelihood of its sustainability by:
– Describing the organization or program/service and
communicating its distinctive mission-based value
– Understanding your market (competition, collaborators,
demand, need, etc.)
– Understanding the financial model underlying your organization
or program/service relative to mission-impact
– Developing appropriate and detailed financial projections to
facilitate sustainability in service to the mission
– Defining operational requirements, including marketing, people,
and learning
Builds a convincing case for support or investment from
donors/investors
Serves as an internal management tool
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Ways to Use the Business Plan
Planning
or
Launching
• Viability: new ventures
(earned income)
• Prospectus:
communicating a
compelling case for
investors/funders to
support
Assessing
or
Refining
• Management: monitoring
and evaluating your progress
• Sustainability: of programs,
departments, or the
organization
• Communications: getting
internal and, sometimes,
external stakeholders on the
same page
Growth
or
Scaling
• Planning: growth or
scale
• Hiring: “selling” your
organization to potential
recruits
• Collaboration:
persuading partners to
collaborate
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A Convincing Case For Support: Contributed or Earned
American Public Health
Association
Wildlife Direct
Philadelphia Museum
of Art Craft Show
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Drivers for Success and Failure
Key to Successful Mission-Based Business Planning
•
•
•
•
•
•
•
Mission and vision clarity
The right team - expertise relevant to your business model
Strong leadership with an identified champion
Data and evidence
Clearly defined ROI targets and metrics
Evidence for sustainability
A leap of faith - an investment will provide the mission-impact
and financial return expected
• An understanding of “earning” support
• Attention to detail
• Assumptions that have been objectively questioned
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Questions?
Components of a
Mission-Based Business Plan
The Process of Writing a Mission-Based Business Plan
1. Market Analysis Relative to Mission
2. Marketing Strategy
3. Operations Strategy: Program Plan, People, Culture
4. Growth or Scaling Strategy
5. Finances & Financial Projections
6. Risk Analysis & Contingency Plan
7. Description of Organization or
Program/Service and Its
Link to Mission
8. Executive Summary
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Basic Market Analysis:
Assessing Supply & Demand In Light of Mission
Demand
Supply
Long-Term
Beneficiaries
Alternatives/
Substitutes
Clients/Customers
Collaborators
Funders/Investors
Competitors
Your Mission &
Program/Service
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Competitive Advantage
• Competitive advantage enables a nonprofit to create
superior value for its customers/clients and a superior return
on investment for funders/investors relative to other suppliers
• Differentiation advantage: when the nonprofit delivers
benefits that exceed those of other suppliers (e.g., higher
quality, deeper impact, add-on services, etc.)
• Cost advantage: when an organization delivers the same
benefits as other suppliers but at a lower cost per outcome
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Marketing Strategy: The Five Ps
Goal: to encourage increased participation and/or investment.
The goal can also be to change the relationship you have with
your clients/customers and investors/funders.
Position
Programs/Services
Pricing
Promotion
Placement
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Value Proposition Statement
• A brief, evidence-based statement about the value of your
services
• Why would your customer/client use, and investor/funder
fund, your services?
• Why would they use or fund your services as opposed to
another’s?
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Operations Strategy: Program Plan
Inputs
Goals,
Outcomes, &
Metrics
Implementation
& Delivery
Follow-up
Services
Ongoing
Communication
& Management
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Operations Strategy: People
• Organizational chart and
staffing
• People at different levels
• HR management strategy
• Potential partners
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Finances & Financial Projections
• Financial plan provides the key financial assumptions used in
building the plan and flows from the explanations and
descriptions in other parts of the plan.
• It answers key questions such as:
1. What are the key assumptions that underlie the financial
plan? What capital is needed to start the initiative and
potentially to expand?
2. Where is the initial support going to come from? Will
there be a need for a loan and if so from whom?
3. What are the expected future earnings?
4. What are the expenses and will there be a gap between
the time to pay expenses and earnings?
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Elements of the Financial Plan
•
•
•
•
Projected Income Statements including pipeline analysis
Balance Sheet
Cash Flow Statements
Break Even Analysis
Broken out quarterly and projected annually for 3-5 years.
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Finances: Possible Sources of Income
Revenue
Contributed
Individuals
Earned
Foundations &
Corporations
Conference
Registration
Bequests/
Planned Giving
Major Gifts
Matching
Grants
Sponsorships
Direct Mail
On-line Giving
Cash Grants
Dues
Events
Board Giving
In-kind Services,
Equipment, Staff
Subscriptions
Telemarketing
Canvassing
Sales
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Risk Analysis and Contingency Planning:
• What are the greatest risks to your plan?
– What indicators are associated with each situation?
– What impact will be realized?
• What is your contingency plan for each potential risk?
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Data-Driven Decision-Making as a
Key to Successful Planning
Assess
Refine
Learn
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A Summary of the Pieces:
Description of Organization and Program/Service
• Description of Organization
– Mission
– 100,000 foot description with brief, relevant history
– Existing and future programs/services
– Growth or scaling opportunities/strategy (if relevant)
• Description of Program/Service
– What is it? How does it support the organization’s mission?
– Whom does it serve? Where and when do they access it?
– What are its tangible features and intangible benefits? What
is its expected social impact?
– What are the key drivers of cost and revenue
considerations?
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Pulling It All Together: Executive Summary
• Short synthesis of the mission-based business plan
– Summarize the organization’s mission and core strategies
– If the plan focuses on a program/service, articulate how it
supports broader mission
– Summarize the need or demand and value proposition
– Summarize the marketing strategy and operations
– State the financial implications
– Discuss contingency scenarios
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Conclusion
A Holistic Representation of
Targeted Organizational Effectiveness
Operations Strategy
Mission Focus
Leadership
Management
Financial
Management /
Projections
Growth/Scaling Strategy
Risk Analysis &
Contingency Plan
Market Analysis
Adaptive
Technical
Marketing Strategy
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Key Concepts To Identify Before Moving Forward
•
•
•
•
•
•
•
•
•
Your team and champion
The “what and where” of your market
Assumptions and evidence!
Mission alignment with data-driven decision-making
Proof that your case is compelling
The appropriateness of scaling
Risks or organizational culture changes
Monitoring plan
Plans to incorporate implementation learning into future
planning
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Mistakes to Avoid
• Lack of data behind claims and assumptions
– “We already know what people need. They need ___.”
• Decisions based on the short-term financial bottom-line
• Lack of data behind financial model assumptions
• Unrealistic optimism
– “We just need the money to try it one time and it will
work.”
– “People will embrace these changes immediately.”
• Lack of consideration for the plan’s key audience(s)
• Unrealistic time frames to roll out the plan
• Assuming your proposed mission has standardized value
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Thank You
Shelly Kessler, [email protected]
Nadia Gomes, [email protected]
www.tccgrp.com
Questions?